# Loan Amortization Calculator

This calculator will figure a loan’s payment amount at various payment intervals — based on the principal amount borrowed, the length of the loan and the annual interest rate. Then, once you have computed the payment, click on the “Create Amortization Schedule” button to create a printable report. You can then print out the full amortization chart.

## The Full Monthly Repayment Chart and Understanding Your Payment Allocations

No one factor affects the cost of purchasing a house more than length of the loan. This may seem like a no-brainer, but so many people look only at the monthly cost and never consider the total cost. That is a huge error. Using our amortization calculator you can enter various scenarios to reveal the true cost of the place you will call home any other type of loan.

### Compare a 30-Year Loan

It can’t be expressed enough that you should almost always choose a 15-year fixed mortgage. Unless you plan to move in a few years, the 15-year is the way to go. In the beginning, a large portion of your payment goes to interest. As time progresses more is placed toward principal, but it takes years before the interest and principal are equal paid. For example, let’s assume you have a \$200,000 fixed mortgage for 30 years at 4% interest and no down payment. Your monthly principal and interest is \$954.83, but it would take 153 payments until more money is directed to principal than interest. The road to building equity is slow moving. After five years you still owe \$180,895; after 10 years you still owe \$157.568, and after 30 you will have paid the bank \$143,739 in interest. Yes, you saw that right. So In reality that \$200,000 home really costs you \$343,739!

### The 15-Year is the Real Winner

Let’s take the same \$200,000 fixed loan at 4%, but this time let’s select a 15-year term. This scenario provides monthly principal and interest of \$1,479.38. This is a bit more than our other example, but stay with me here. Right off the bat, more of your investment is going more to principal than interest. After five years you still owe \$146,117; after 10 years you still owe \$80,328, and at the end of the term you will have paid the bank only \$66,287 in interest. This time the total cost of borrowing \$200,000 is \$266,287 saving you \$77,452 in interest compared to the 30-year option. Think of what your life would be like being mortgage free after only 15 years and having an extra \$77,452 in your pocket!

Figure your savings by comparing 15-yr vs 30-yr loans side by side.

### Few are Disciplined Enough

You may say that you don’t want to be locked into that higher payment and that you’ll simply add extra each month to reduce some of that interest? It rarely happens. Life happens, and the extra money slides through your fingers for things you no longer remember. Forcing yourself to fit the higher payment into your budget from the start is the only way to ensure paying the loan off in 15 years and saving all that interest.